Telecom service provider Vodafone has sought an extension from the income tax department over the tax claim issue in its $11.2 billion deal with Hutchison Telecommunications International Ltd in 2007. The company had to reply to a showcause notice from the department by November 16.
“We are working with the tax office to obtain an extension to file a response to the show-cause notice,” Vodafone said in a statement. A spokesperson declined to comment on how much time was needed.
The department had issued a showcause notice to Vodafone on October 30 and asked it to explain why it should not be held that “the tax department has competent jurisdiction to proceed against it for the default of non-deduction of tax at source” in the transaction.
Vodafone had earlier maintained that no tax was payable on this transaction. On May 8, 2007, Vodafone had paid $11.2 billion to Hutchison for transfer of interest in the Indian company Hutch Essar Ltd. An earlier notice issued in the matter to Vodafone was challenged before the Bombay High Court, which was dismissed on December 3, 2008. Vodafone then filed a petition before the Supreme Court against the HC order. On January 23, 2009, the apex court dismissed its appeal, saying CBDT had jurisdiction over the matter. The court, however, gave it the liberty to “question the decision of the authority on the preliminary issue before the High Court, in the event the same is decided against it”.
